November 24, 2020
SEC Settles Charges Against Investment Advisory Firms and Dually-Registered Broker-Dealer and Investment Adviser Firms Related to Sales of Complex Exchange-Traded Products
The SEC recently announced that it has entered into settlement agreements with three investment advisory firms and two dually-registered broker-dealer and advisory firms (the firms) related to the firms’ recommendations to retail investors of certain complex exchange-traded products (ETPs) linked to volatility benchmarks, including exchange-traded notes (ETNs) and exchange-traded funds…
November 20, 2020
Compliance and Effective Dates Set for Final Rule and Related Amendments for Fund-of-Funds Arrangements
On November 19, 2020, the release reflecting the SEC’s adoption of Rule 12d1-4 (FoF Rule) under the 1940 Act and related amendments designed to implement a regulatory framework for investments by registered investment companies and business development companies (BDCs) (collectively, funds) in underlying funds was published in the Federal Register,…
November 18, 2020
SEC Adopts Modernized Regulatory Framework for Derivatives Use by Registered Investment Companies and Business Development Companies
The SEC recently adopted Rule 18f-4 (Rule), and rule and form amendments under the Investment Company Act of 1940, as amended (1940 Act), designed to provide a modernized and comprehensive approach to the regulation of the use of derivatives and other financial instruments by registered investment companies and business development…
October 29, 2020
SEC Staff’s Latest Dear CFO Letters Rescind or Modify Certain Existing Staff Positions and Express New Staff Positions
On October 23, 2020, the staff of the SEC Chief Accountant’s Office of the Division of Investment Management (Staff) issued its latest industry comment letters (Dear CFO Letters) directed to chief financial officers and independent public accountants of funds and business development companies (BDCs) regarding accounting- and auditing-related disclosure matters.
October 22, 2020
SEC Adopts Final Rule and Related Amendments for Fund-of-Funds Arrangements
The SEC recently adopted a new rule, Rule 12d1-4 (FoF Rule), and related amendments designed to implement a regulatory framework for investments by registered investment companies and business development companies (BDCs) (collectively, funds) in underlying funds. The release adopting the amendments (Adopting Release) also rescinds Rule 12d1-2 (which applies to…
October 9, 2020
SEC Reaches Settlement with Investment Adviser Regarding Recapture of Waived Fees and Reimbursed Expenses from Money Market Funds
The SEC reached a settlement with a registered investment adviser (Adviser) for making material misrepresentations regarding the expenses paid by four money market funds (Funds) that the Adviser managed, in connection with fund reimbursement of fees and expenses that the Adviser had waived or reimbursed during the period from January…
October 5, 2020
SEC Settles Charges Against Investment Adviser for Unlawful Cross Trades
The SEC recently settled charges against a registered investment adviser that engaged in hundreds of impermissible cross trades, including principal transactions, between its client accounts. The SEC Order found that the investment adviser violated Sections 17(a)(1) and 17(a)(2) of the 1940 Act, and Rule 38a-1 thereunder, and Sections 206(3) and…
September 23, 2020
NYSE Arca, Inc. Files Proposed Rule Change to Adopt a Generic Listing Rule for Certain Semi-Transparent ETFs
On September 15, 2020, the SEC issued a notice (Notice) regarding the NYSE Arca, Inc.’s (Exchange) filing of a proposed generic listing rule for certain semi-transparent ETFs (ST ETFs). An ST ETF is an exchange-traded fund that discloses alternative forms of information about its underlying portfolio each day, such as…
August 7, 2020
SEC Proposes Modernizations to Fund Shareholder Reports and Disclosures
On August 5, 2020, the SEC proposed rule and form amendments to modernize the disclosure framework for open-end funds (including mutual funds and ETFs) with respect to shareholder reports and ongoing prospectus updates (Amendments). The Amendments would streamline shareholder reports for open-end funds to require these reports to highlight and…
August 7, 2020
Director of SEC’s Division of Investment Management Discusses Easing Restrictions on Certain Registered Fund Investments in Private Funds
At a recent speech at PLI’s Investment Management Institute, Dalia Blass, Director of the SEC’s Division of Investment Management (Division), announced that the Division’s staff (Staff) was re-examining a Staff position that historically limited certain registered fund’s investments in underlying hedge funds and private equity funds (private funds). The Staff’s…